Allendale Livestock Wrap-Up for 10/1/2009
Hogs: The market is starting to be overcome by this supply issue. As we have noted a few times here, pork production increases each week into late November/early December. Cash hogs typically break into December or so. Futures however, had only been plugging in a mild decline in prices. Today, we saw cash pork break $1.79. On top of yesterday’s $1.41 drop we should be confirming that cash hogs peaked a week ago and are now under pressure. That $1.79 break in cash pork today should pressure tomorrow’s opening. We still look for a $47 expiration price on the December contract.
Rich Nelson is Director of Research at Allendale, Inc. in McHenry, IL. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com